1. Estimation of costs
This section provides an indication of costs linked to establishing and running the College of Food, based on existing institutions.
The Education and Skills Funding Agency estimates that a one year, full-time cookery course or apprenticeship costs between £5,000-£9,000 to run (for apprenticeships, full time means 20 per cent of the working week is spent in college and the rest with an employer). The actual running costs might be a little less than this, but not by very much, as any surplus or profits in the further education sector tend to be around one to two per cent. 23
Of course, these are the running costs covered by public funding entitlements and wouldn’t cover very much of any recruitment and outreach activities, student or alumni support services, which are key objectives of the College of Food. Costs at private institutions, like Le Cordon Bleu London, are higher. This may be because of greater spend on teaching and equipment, a central location, or because the school’s small size prevents it from achieving economies of scale. Staffing is colleges’ largest costs – at roughly three quarters of their total expenditure. Some colleges have reduced staffing costs (especially pensions) by operating some of their activities under charity status.
Private and public providers have mentioned in research interviews that the subsidy per learner is low relatively to the costs specific to delivering cooking training – such as space and smaller class size, equipment and ingredients. Apprenticeships funding entitlements also cover an end point assessment that routinely represents 10 per cent of total training costs.
Set up costs
The funding entitlements and fees available to colleges do not cover any set up costs. There are few examples of recent new colleges on which to base estimates. The Ada College for Digital Skills provides a case study. It was a totally new institution and therefore required a large investment in a new building, IT, recruitment, branding and marketing, and fundraising. Colleges are also paid in arrears (their funding entitlements are calculated from the number of learners in previous years), and so new colleges need an advance on future income to start up.
Case study: Set up costs for the Ada College for Digital Skills
The Ada College for Digital Skills is a specialist FE college based in Tottenham. Established in 2016, it is the first FE college created in England since 1993.
The college needed a significant financial donations to get started. In hindsight, one of the founders noted that working as a subsidiary of another college could have provided “80 per cent of the benefits without the pain.”
Set up costs included:
- £40 million capital funding from government and Mayor of London;
- £420,000 ‘start up loan’ from the Education and Skills Funding Agency;
- £800,000 donations from industry partners, charitable trusts and foundations for the period 2017-2019;
- Donations in kind for equipment.
Operational costs are funded by the government and employers via provision for 16-19 years old and the apprenticeships levy.
This section explores funding models for the College of Food.
Though some cookery programmes operate without public funding, they either rely on learner fees or charitable donations to do so, and are usually small providers – Le Cordon Bleu being an exception, with over 300 students (although this is small compared to most universities).
For the larger providers such as FE colleges, grants for apprenticeship funding, 16-19 and adult skills provision are the primary sources of revenue. Colleges also attract investment from employers to providing training to their staff, whether in cash or in-kind contributions, for example into kitchen equipment, clothing or ingredients. To be sustainable, the College of Food will need to draw on as many revenue sources as possible.
The College will certainly need additional support with start-up costs for buildings, and to draw up new partnerships between colleges and with employers, to expand the curriculum, broaden school outreach and maintain a network of alumni, who can support the college, through teaching, providing work experience and employment for graduates. Once up and running, the College should be able to sustain its operations through standard government funding, international student fees, charitable donations and corporate sponsorship.